While European investors continue to put their money into the U.S., a change in the Paris Stock Exchange rules is making it easier for U.S. investors to hunt for bargains in Europe.
NicOx (NM:Nicox) last week became the first company to take advantage of the rule change, raising E26 million ($31.8 million) through a PIPE of 9.4 million shares at E2.75, a 15% discount to the closing price of E3.23 on Wednesday, the day prior to the announcement.
In June, the French government modified the so-called "Ordonnance" for French public companies looking to raise funds. The government dropped a regulation under which companies looking to raise cash from new investors had to use the average price for 10 days out of 20 to price an offering. The change makes it easier for public companies to offer investors a discounted price, as they do in U.S. PIPEs, rather than having to price an offer close to the market.
Under the new regulations, up to 15 new funds could invest in the offering. Of the funds that invested, 14 were U.S.-based, and one was from the U.K. The offer represents about 29% of the company's issued share capital and gives Nicox about E53 million ($64.9 million) in cash, enough to last three years.
"Continental European investors are not as experienced as U.S and U.K. investors, and under the new regulations we were only able to approach specialist funds," said CEO Michele Garufi. "In Europe, investors and analysts had basically written us off after the AstraZeneca deal fell through."
Last year, AstraZeneca (LSE:AZN; AZN) said that AZD3582 (HCT 3012), a nitric oxide (NO)-releasing naproxen, had not met the clinical endpoint in Phase II trials in osteoarthritis (OA) of the knee. Nicox reacquired rights to HCT 3012